Latest news with #CaliforniaDecoded
Politico
24-06-2025
- Entertainment
- Politico
Don't touch that sound dial!
Presented by California Resources Corporation QUIET ON SET: State Sen. Tom Umberg just wants to watch TV without being subjected to blaring commercials. Hollywood's biggest streaming platforms wish he'd keep his hands off the volume dial. The Santa Ana Democrat wants to ban platforms like Netflix and Hulu from airing ads louder than the shows and movies they accompany. His SB 576, would close a loophole in a 2010 federal law (authored by former California Rep. Anna Eshoo) that already bans ear-splitting ads on cable and broadcast TV but doesn't cover streaming services. Umberg argues it's a simple way to solve a recent spike in volume complaints and preserve peace of mind for people like Zach Keller, his legislative staffer who said loud streaming commercials are waking up his infant daughter. 'The golden rule is you've got to keep the baby asleep, and anything that wakes that baby up should be closely scrutinized — as should streaming services,' Umberg testified today, minutes before his bill cleared the Assembly Privacy Committee. And given California's outsized sway in the entertainment industry, there's a chance Umberg's bill could set a de facto nationwide standard if he emerges victorious. 'It's disruptive and an annoyance,' Umberg told California Decoded in an interview. 'If we can [ban] it at the federal level … we certainly can do it for streaming services.' Hollywood begs to differ. The Motion Picture Association and Streaming Innovators Alliance, which together represent entertainment giants including Disney, Paramount, Amazon and Netflix, have barged in with last-minute objections, urging lawmakers to derail Umberg's effort. In a four-page letter sent last week, the groups argued they're already exploring ways to address ad volume issues. Yet they also said streaming platforms have 'no ability' to control volume settings on every device where their content is offered — much less regulate 'ready-to-watch commercials sourced from thousands of advertisers.' 'Unlike in the broadcasting [and] cable network environment, where advertisers sell their ads directly to the networks, streaming ads come from several different sources and cannot necessarily or practically be controlled by streaming platforms,' Melissa Patack, the MPA's vice president of state government affairs, testified Tuesday. So can streamers control ad volumes, or can't they? Patack told the committee that's beyond streamers' grasp for now, but that platforms could address the issue if given time to work on a solution with audio engineers, free from legal repercussions outlined in Umberg's bill. But Umberg thinks streamers are more than capable of turning down the volume — it's just a question of whether they want to. 'They know how old I am. They know what cereal I like,' he testified. 'They can figure out how not to increase volume.' A version of this report first appeared in California Decoded, POLITICO's morning newsletter for Pros about how the Golden State is shaping tech policy within its borders and beyond. Like this content? POLITICO Pro subscribers receive it daily. Learn more at IT'S TUESDAY AFTERNOON. This is California Playbook PM, a POLITICO newsletter that serves as an afternoon temperature check on California politics and a look at what our policy reporters are watching. Got tips or suggestions? Shoot an email to lholden@ WHAT YOU NEED TO KNOW TODAY PUT IT IN WRITING: Legislative leaders and Gov. Gavin Newsom reached a budget agreement that delays cuts to Medi-Cal and safety net programs while closing a $12 billion spending gap, our Eric He reports for POLITICO Pro subscribers. One unresolved piece of the deal, a housing proposal by state Sen. Scott Wiener to exempt many types of urban housing projects from environmental review, will be taken up by legislators later this week. The rest of the budget agreement, which lawmakers are expected to approve on Friday before sending to Newsom for his signature, largely reflects the priorities of the Democratic supermajority in the state Legislature that rejected many of the governor's proposed slashes. Amid fierce backlash from progressives and advocacy groups, Democratic state lawmakers sought to stave off many of Newsom's proposed cuts, turning instead to deferrals and borrowing from state reserves. They are banking on California's economic outlook improving in future years, allowing the state to reduce the severity of the reductions. 'Under very difficult circumstances, we passed a solid budget that protects California's values,' Wiener said in an interview. 'And I'm proud of the result.' IN OTHER NEWS TAKING CHARGE: California Rep. Robert Garcia won his bid to become the top Democrat on the House Oversight Committee, beating out Massachusetts Rep. Stephen Lynch in today's caucus vote, our Nicholas Wu reports. Garcia, 47, secured a first-ballot majority after winning the backing of the caucus' powerful Steering and Policy Committee on Monday evening. 'We'll get immediately to work,' he told reporters following the vote. First on the agenda, Garcia added, was meeting with the Oversight Committee staff 'to let them know that we're ready for consistent leadership.' MILEAGE MAY VARY: Senate Democrats introduced a bill today that would significantly overhaul how California regulates transportation fuels amid concerns about high gas prices and closing refineries, our Alex Nieves reports for Pro subscribers. State Sen. Tim Grayson, a moderate Bay Area Democrat, amended SB 237 — which previously dealt with property transfers — into a sweeping proposal that would cap the price of credits that fuel manufacturers can buy and sell through the state's low-carbon fuel standard. It would potentially transition California away from its unique gasoline blend and instead align gas specifications with other western states. State Sens. Melissa Hurtado, Jerry McNerney and Laura Richardson are signed on as joint authors. WHAT WE'RE READING TODAY — Members of Congress continue to buy pharmaceutical stocks, even as President Donald Trump's administration slams the industry. California Rep. Ro Khanna leads his party in purchases. (POLITICO) — A DoorDash executive was among the eight people killed on Lake Tahoe after a powerboat capsized during a sudden storm. (San Francisco Chronicle) — Soldiers and their families have been calling the GI Rights Hotline with concerns about Trump's deployment of the California National Guard to Los Angeles. (Los Angeles Times) AROUND THE STATE — The San Diego City Council finalized compromise budget funding for brush management, flood prevention and recreation programs that Mayor Todd Gloria tried to veto. (San Diego Union-Tribune) — A state audit revealed that a charter school in Sacramento received more than $180 million in state funds that it was not eligible for following little oversight by state and local educational agencies. (Sacramento Bee) — The San Mateo County Board of Supervisors used for the first time its newly granted power to remove an elected sheriff for misconduct, among other violations. (East Bay Times) — compiled by Juliann Ventura
Politico
06-06-2025
- Automotive
- Politico
Gavin Newsom to Hollywood: Come back
Presented by DRIVING THE DAY — Elon Musk's escalating feud with President Donald Trump was catnip for California Democrats — who've long brooded over Musk's conservative pivot after California subsidies drove Tesla's early success. The rift threatens to blow up Republicans' megabill to fund Trump's domestic agenda. While some Democrats are weary about welcoming Musk back to their lunch table, Silicon Valley Rep. Ro Khanna said the party should 'be in a dialogue' given their shared opposition to the megabill. 'We should ultimately be trying to convince him that the Democratic Party has more of the values that he agrees with,' Khanna told our colleagues in D.C. Meanwhile, Musk's Trump criticism hasn't opened the floodgates for other tech world elites to start bashing the president — yet, as our Chase DiFeliciantonio and Christine Mui write in this morning's California Decoded newsletter. LEADING MAN — Gov. Gavin Newsom and Hollywood's elite have always gone hand-in-hand, with wealthy donors from the industry helping fuel every stage of Newsom's rise up California's political ladder. Now the Democratic governor has made saving the Golden State's iconic industry a central mission of his final two years in office. Doubling the state's film tax credit is Newsom's No. 1 budget priority in Sacramento this legislative session, despite the state facing a $12 billion deficit. As our colleague Melanie Mason writes this morning, Newsom wants to lure back production companies that have fled in droves to other states and countries. THE STAKES … It's a gambit that could also help Newsom prepare for the next stage of his career as he eyes a potential 2028 White House bid — when he would surely need Hollywood's support. The governor is already competing with President Donald Trump to be Hollywood's savior. Trump, who regularly trades barbs with the governor, has chided Newsom's treatment of the film industry as 'grossly incompetent.' And if Newsom does run in 2028, he likely cannot afford to lose major swaths of the industry in his home state to any other Democratic primary contender. IT'S A TALL TASK FOR NEWSOM … Hollywood has been pummeled by a perfect storm of problems: Many production studios have already relocated due to more lucrative incentives in Georgia, the United Kingdom and elsewhere. Moreover, the pandemic, the dual writers' and actors' strikes in 2023 and the historic Los Angeles wildfires in January have jolted Tinseltown. 'The time for this discussion was 10, 15, 20 years ago,' Richard Rushfield, editorial director and columnist with The Ankler, an industry newsletter, told Melanie. He added, 'If he's going to run for president, this is gonna come up. And he's got to be able to say that he tried.' BUT HE HAS TINSELTOWN SWAGGER … Other Hollywood insiders said Newsom's proposal for a revamped $750 million tax break has been greeted with great enthusiasm. Some see it as a signal that Sacramento is becoming more attuned to the industry's needs — traditionally, the perception has been that the capital crowd cares little about one of the state's crown industries. 'My hope is we blow through this money, and we're gonna have to go back to the governor for even more next year, and we can show that it's an economic engine for the state as well,' said Scott Budnick, the film producer behind 'The Hangover' and other blockbusters. Don't miss Melanie's story out today about Newsom's quest to save the film industry. GOOD MORNING. Happy Friday. Thanks for waking up with Playbook. You can text us at 916-562-0685 — save it as 'CA Playbook' in your contacts. Or drop us a line at dgardiner@ and bjones@ or on X — @DustinGardiner and @jonesblakej. WHERE'S GAVIN? Nothing official announced. NEWSOMLAND FIRST IN POLITICO: HOLLYWOOD HUDDLE — Newsom and Jon Voight, the actor-turned-show biz emissary for Trump, met privately Thursday afternoon in Century City, to discuss their shared interest in boosting Hollywood. As Melanie also reported, the pair talked about Voight's proposal to reshore the American film industry through a combination of federal tax credits and tax code changes, according to a person with knowledge of the meeting granted anonymity to discuss it. They also talked about Newsom's push to double California's film tax credit. 'They shared a commitment to working together to help to build up the film industry in the U.S. — particularly California and Los Angeles,' the person said, adding that Newsom expressed interest in working with Trump on the issue. ON THE HILL AFTER GRADUATION — Former Education Secretary Miguel Cardona will serve on the advisory board of the USC Schwarzenegger Institute, becoming the latest Biden administration official to dip his toes in California's policy world. Others include former Small Business Administration Secretary Isabel Casillas Guzman, who moved back to California and started a consulting firm after the election, and Newsom Cabinet Secretary Nani Coloretti, who was deputy director of the Office of Management and Budget. Cardona served throughout Biden's term, overseeing efforts to cancel student loan debt as well as the rocky rollout of the new FAFSA form. Before that, he was the top education official in Connecticut, a school administrator and a teacher. 'Miguel's leadership on closing opportunity gaps and expanding access to quality education aligns perfectly with our mission to put people over politics and champion solutions that work,' former Gov. Arnold Schwarzenegger said in a statement. 'We both share a deep commitment to expanding access to quality after-school programs, which play a critical role in keeping kids safe and helping them reach their full potential.' STATE CAPITOL TUCK'S RENAISSANCE — Marshall Tuck was seen as a force for charter schools when he twice ran for state superintendent in the 2010s. But these days, he said, the schools seldom come up at his day job. The former charter system leader has since 2022 healmed the education nonprofit EdVoice, a group that historically fought on charters' behalf against teachers unions, most memorably in a major policy brawl in 2019. But after Newsom signed sweeping new rules for charters, the organization went dormant, before relaunching in 2023 newly under Tuck's leadership with a focus on closing achievement gaps. Not rejoining the charter wars. 'There was no being beholden to what the organization had done historically,' Tuck told Playbook. 'It was almost like a clean slate.' The organization has, since rebooting, focused primarily on literacy and teacher training legislation that has little to do with charters. 'We believe that there's too much emphasis on school governance and not enough emphasis on classroom instruction, student supports, more time for kids to learn,' Tuck said of the group's philosophy. 'We think charters are an important part of the public education system, but they're just a part.' The shift in focus was on display Thursday, when the Assembly passed a pair of major education bills. EdVoice was a central proponent of one — a landmark proposal to push schools to use evidence-based reading instruction. Meanwhile, the nonprofit didn't even take a position on a hotly contested bill that would place new rules on virtual charter schools. The organization hasn't to this point lobbied on that proposal, either, Tuck said Thursday. The organization's de-emphasizing of charter issues has seemingly paid dividends. The literacy proposal nabbed Assembly Speaker Robert Rivas' support, and Newsom included $200 million for training teachers on evidence-based literacy instruction in his latest budget proposal. Newsom also in 2023 signed EdVoice-backed legislation to mandate dyslexia risk screenings after similar efforts stalled repeatedly during his first term. CLIMATE AND ENERGY ESSAYLI STRIKES — The assemblymember-turned-U.S. Attorney Bill Essayli warned SoCal air regulators Thursday that he plans to sue over a pair of rules they're set to consider today restricting gas-powered space and water heaters, as POLITICO's Alex Nieves reports for subscribers. 'The President has directed us to take a strong stand against state and local policies that obstruct domestic energy production and usage,' Essayli said in a statement. 'My office is fully committed to upholding that directive and protecting our communities from these reckless measures.' The hot-button rules have drawn some 14,000 public comments ahead of today's hearing, including an op-ed this week from former Los Angeles mayor and gubernatorial candidate Antonio Villaraigosa arguing the rules will be too expensive when added atop Trump's trade war. BLAME TESLA — Trump is laying his and Musk's shattered bromance at the feet of a disagreement over electric vehicles. Read last night's California Climate to see why Californians aren't buying it. TOP TALKERS THROWN UNDER THE BUS — Most of the job cuts proposed in San Francisco Mayor Daniel Lurie's budget are in the Municipal Transportation Agency, the San Francisco Chronicle reports. The agency is slated to lose about 300 jobs as the city looks to reduce its roughly $800 million two-year budget deficit. TORRANCE LOCKS ARMS — The story of a fourth-grader at Torrance Elementary School, who was detained by ICE and is set to be deported to Honduras with his father, has prompted his classmates' parents and the PTA to reach out to elected officials for support, the Los Angeles Times reports. 'When something like this happens, it shakes all of us in the community. There's not a child at our school that we don't treat as our own,' said Torrance Elementary PTA volunteer Ria Villanueva. AROUND THE STATE — Videos posted on Facebook appear to show Poway City Councilmember Tony Blain being detained by police outside of City Hall this week; he faces allegations of vote trading. (The San Diego Union-Tribune) — A jury found that Orange County District Attorney Todd Spitzer harassed former prosecutor Tracy Miller and awarded her $3 million in damages. (The Daily Pilot) — A California court ruled that state law prohibits you from holding your phone to look at a map while driving. (Los Angeles Times) — Longtime Democratic strategist Garry South opines that Newsom will be a 'hard act to follow' for the next governor. (Capitol Weekly) Compiled by Nicole Norman PLAYBOOKERS SPOTTED: HOLD THAT PLANE! — Several Republican lawmakers, including Assemblymembers Carl DeMaio, Tri Ta, Kate Sanchez and Diane Dixon, were seen sprinting through the Sacramento airport Thursday to catch their flight home to SoCal. PEOPLE MOVES — Adam Taylor is now chief of staff for Rep. Scott Peters. He was previously Peters' legislative director. Dillon Cooke is now legislative director for Peters. He was previously Peters' senior legislative assistant. BIRTHDAYS — director Abby Ginzberg … actor Jason Isaacs … Paul Giamatti BELATED B-DAY WISHES — (was Thursday): Dov Waxman … Assemblymember LaShae Sharp-Collins (favorite cake: her grandmother's lemon cake recipe) WANT A SHOUT-OUT FEATURED? — Send us a birthday, career move or another special occasion to include in POLITICO's California Playbook. You can now submit a shout-out using this Google form.
Yahoo
22-05-2025
- Business
- Yahoo
California's revamped Google journalism deal raises new questions
SAN FRANCISCO — California's bold experiment to make Big Tech pay for local journalism just hit a double-speed bump. Last week, Gov. Gavin Newsom dialed back state support for a first-in-the-nation newsroom fund in the face of a $12 billion state deficit. Then on Wednesday, Google — the lone corporate backer of the initiative — decided to lower its own tab by a third, from $15 million to $10 million for this year. The handshake deal to support local journalism with both state and Google funds emerged from negotiations with Sacramento lawmakers last summer, who had initially proposed legislation to force tech giants to compensate online publishers as they're required to in countries like Canada. The deal was hailed as a landmark arrangement that could set a precedent for other states seeking to prop up struggling newsrooms decimated by lost advertising revenues as readers turn to aggregation sites such as Google News. Those concerns have been particularly acute in California, where outlets like the Los Angeles Times, the state's largest newspaper, have seen mass layoffs in recent years. Google did leave the door open to match up to $5 million more if other private, public or philanthropic donors step up. None did on Wednesday. But the latest changes to the deal are drawing vocal criticism, both old and new, while also raising questions about what it means for the future of the initiative. Here's a rundown of the lingering unknowns as California reworks its Google news deal. A version of this story first appeared in California Decoded, POLITICO's morning newsletter for Pros about how the Golden State is shaping tech policy within its borders and beyond. Like this content? POLITICO Pro subscribers receive it daily. Learn more at That's the new name for the initiative, previously known as the 'Newsroom Transformation Fund.' The rebrand came out of discussions with stakeholders and the state library as the new public partner, a spokesperson for Assemblymember Buffy Wicks, a Bay Area Democrat who announced the details and led negotiations for the fund, told POLITICO. California Press Forward, California Black Media and a journalism professor joined the press release with statements of support. Several skeptics of the deal turned even more doubtful. 'Google got almost everything they wanted,' bemoaned former state Sen. Steve Glazer, who had authored a shot-down bill that sought to sustain newsrooms by taxing digital ad revenue. 'One, they wanted their amount to be at a modest level. Two, they wanted a state match so they could avoid setting a precedent that other states could follow.' Glazer added that the downsizing of the program would force newsrooms to 'fight over crumbs,' without making a dent in reversing the journalism industry's decline. He downgraded his assessment of the initiative from a '2 percent' solution last year to a '1 percent solution.' Rebuild Local News President Steven Waldman similarly said that while he appreciates that efforts to help local news are moving forward, 'the plan is more than 50 percent smaller than the already-too-small program.' California Broadcasters Association President Steve Stuck, whose members are not part of the deal, told POLITICO: 'It was disappointing, I think, to everybody. When Newsom released a budget and they saw it went from 30 to 10, you know it's going in the wrong direction.' Other media groups that had been more supportive have since gone quiet. The California News Publishers Association, which issued a statement of support to Wicks' summer announcement and will have two seats on the fund's advisory board, did not respond to a request for comment. In another twist, the California State Library is officially hosting the fund after UC Berkeley's journalism school walked away from the responsibility late last year over concerns about how the money would be distributed. One area of hesitation from critics was oversight over and independence in allocating the millions. Under the revised agreement, an advisory board will help the state librarian create programs supported by the fund and offer direction on how they should be spent. However, the state library still gets the final say. The board will expand from seven to nine members, adding two seats reserved for State Library appointees alongside news publishers, members of journalism ethics groups and journalists' unions. 'Whenever we encounter proposals to provide grants to news organizations from the executive branch of government, we want to ensure that it's done in a way that doesn't inadvertently undermine editorial independence,' said Waldman, who considered the issue 'fixable.' Wicks' plan is to release a fuller proposal in a budget trailer bill in the coming days. State lawmakers will consider the bill as leaders work with Newsom's office to iron out a final state budget over the next few weeks. Waldman urged lawmakers to reject Newsom's proposed $20 million cut to the fund, while Glazer said he would prefer a separate bill outside the budget process. 'It's actually a significant policy matter, and that should typically be the contents of a legislative bill that goes through the hearing process in both houses,' the former state senator argued. In addition to the fund, last summer's agreement included plans to invest $12.5 million more per year of Google's funding into researching and developing AI tools as part of an accelerator program. The program drew backlash, as news organizations feared the technology could replace reporters' jobs. Though Wednesday's announcement didn't mention the accelerator, a Google spokesperson confirmed to POLITICO that the company's funding for it remains unchanged. Wednesday's announcement made clear that the fund is actively seeking additional funders. And OpenAI's vice president of global affairs, Chris Lehane, provided a quote for the release, saying the company 'appreciates the opportunity to collaborate on this important project.' But spokespeople for the AI developer declined to clarify its current role in the effort. When the partnership was first announced last summer, OpenAI said it was proud to be part of the initiative 'to utilize AI in support of local journalism across California.' A program funded in 2022 by the Legislature, called the California Local News Fellowship and run out of UC Berkeley, has put $25 million into placing more than 100 early career reporters and editors into newsrooms. It's also running out of money. On Wednesday, a state Senate budget subcommittee heard why the program should, or should not, be given another infusion of cash in a severely budget-strapped year in Sacramento. University of California Associate Director of State Budget Relations Seija Virtanen said the money would be exhausted by the end of 2027, while Republican state Sen. Rosilicie Ochoa Bogh questioned what the value was to taxpayers. Appearing as a witness, Glazer put it plainly, saying: 'It's important because most of the decision that you make as senators comes from learning about problems in your community.' He added: 'Local news is essential to our ability to be an independent democracy.' Tyler Katzenberger contributed to this report.
Yahoo
10-04-2025
- Business
- Yahoo
California faces pressure to wade into Elon Musk-Sam Altman row
SAN FRANCISCO — California Attorney General Rob Bonta is facing growing pressure from major nonprofits to take action against OpenAI — a move that could potentially place him in an awkward alliance with Elon Musk. The pressure campaign comes as Musk's rivalry with former business partner Sam Altman is heating up in court over OpenAI's plan to become a for-profit company. Bonta is already probing OpenAI's shift to a for-profit model, but should his office further shoulder into the legal dispute, they could find themselves on the same side as estranged early OpenAI funder Musk, who has taken the Delaware-incorporated company to court to block its conversion. OpenAI countersued the billionaire in federal court Wednesday. Musk and Bonta would make even stranger bedfellows. The top state lawyer has increasingly become the face of California's Trump resistance, suing the administration over the Musk-led DOGE effort to fire thousands of federal workers and choke off federal funding to California and other states. Meanwhile, Bonta is also defending the state's social media laws against Musk's legal challenges. A coalition of nonprofit leaders sent a letter to Bonta's office on Wednesday, including from the San Francisco Foundation and Economic Security Project, as well as labor groups, calling on the AG to 'take action to transfer OpenAI's charitable assets to a truly independent nonprofit or nonprofits.' 'This isn't about trying to stop the conversion of nonprofit to for-profit,' Fred Blackwell, the CEO of the San Francisco Foundation, told POLITICO's California Decoded newsletter. 'It's really purely about making sure the assets that were accumulated for the public good stay that way.' The group points to the state attorney general's office intervening in the 1990s when nonprofit health companies like The California Wellness Foundation (a petition signatory) were established through a transfer of charitable assets. 'Similarly, it is imperative that the Attorney General demand the distribution of OpenAI, Inc.'s charitable assets to independent nonprofit entities that will use these assets for public benefit,' the petition said. Blackwell's group sent a letter to Bonta's office in January to that effect before filing the longer detailed petition, where they characterize potentially the entirety of OpenAI's latest $300 billion valuation as charitable assets. 'Our Board has been very clear that we intend to strengthen the non-profit so that it can deliver on its mission for the long term. We're not selling it, we're doubling down on its work,' an OpenAI spokesperson said in a statement. The company previously told POLITICO it plans to make its nonprofit parent company a shareholder in the new for-profit enterprise, and to appoint a committee to oversee and distribute the assets that flow into it. OpenAI met with the petitioners before they filed their petition Wednesday and offered to have their respective legal teams meet, according to an email seen by POLITICO, and a person with knowledge of the situation who was not authorized to discuss it publicly. Bonta's office said in an emailed statement that the California "Department of Justice is committed to protecting charitable assets for their intended purpose.' His office declined to comment on any ongoing investigations, but referenced its letter to OpenAI requesting restructuring plans and the value of its charitable assets. OpenAI countersued Musk in a California court on Wednesday, directly disputing his claims and accusing him of intentionally trying to hamstring OpenAI as he builds his own competitor, xAI. 'Elon's nonstop actions against us are just bad-faith tactics to slow down OpenAI and seize control of the leading AI innovations for his personal benefit,' the company wrote on X, the site Musk owns. The Delaware attorney general's office has said it is in conversation with OpenAI and is reviewing the matter. Musk's attorneys have tried to bring Bonta into the case he filed against OpenAI on public interest grounds, but so far the attorney general has declined, said Rose Chan Loui, a nonprofit law expert at UCLA. Bonta 'is trying to get out of the federal case mostly on the argument that they can't be dragged into federal court,' she said. But 'Elon Musk has filed a brief saying that we're not dragging you in as a defendant, we're dragging you as a matter that concerns you.' At stake is not just the open question of how much of the company's $300 billion valuation should be conserved as nonprofit assets, Loui said. The company in raising its latest $40 billion funding round agreed to return half that amount if it does not make the change to a for-profit this year. Like this content? Consider signing up for POLITICO's California Decoded newsletter.
Politico
10-04-2025
- Business
- Politico
California faces pressure to wade into Elon Musk-Sam Altman row
SAN FRANCISCO — California Attorney General Rob Bonta is facing growing pressure from major nonprofits to take action against OpenAI — a move that could potentially place him in an awkward alliance with Elon Musk. The pressure campaign comes as Musk's rivalry with former business partner Sam Altman is heating up in court over OpenAI's plan to become a for-profit company. Bonta is already probing OpenAI's shift to a for-profit model, but should his office further shoulder into the legal dispute, they could find themselves on the same side as estranged early OpenAI funder Musk, who has taken the Delaware-incorporated company to court to block its conversion. OpenAI countersued the billionaire in federal court Wednesday. Musk and Bonta would make even stranger bedfellows. The top state lawyer has increasingly become the face of California's Trump resistance , suing the administration over the Musk-led DOGE effort to fire thousands of federal workers and choke off federal funding to California and other states. Meanwhile, Bonta is also defending the state's social media laws against Musk's legal challenges . A coalition of nonprofit leaders sent a letter to Bonta's office on Wednesday, including from the San Francisco Foundation and Economic Security Project, as well as labor groups, calling on the AG to 'take action to transfer OpenAI's charitable assets to a truly independent nonprofit or nonprofits.' 'This isn't about trying to stop the conversion of nonprofit to for-profit,' Fred Blackwell, the CEO of the San Francisco Foundation, told POLITICO's California Decoded newsletter . 'It's really purely about making sure the assets that were accumulated for the public good stay that way.' The group points to the state attorney general's office intervening in the 1990s when nonprofit health companies like The California Wellness Foundation (a petition signatory) were established through a transfer of charitable assets. 'Similarly, it is imperative that the Attorney General demand the distribution of OpenAI, Inc.'s charitable assets to independent nonprofit entities that will use these assets for public benefit,' the petition said. Blackwell's group sent a letter to Bonta's office in January to that effect before filing the longer detailed petition, where they characterize potentially the entirety of OpenAI's latest $300 billion valuation as charitable assets. 'Our Board has been very clear that we intend to strengthen the non-profit so that it can deliver on its mission for the long term. We're not selling it, we're doubling down on its work,' an OpenAI spokesperson said in a statement. The company previously told POLITICO it plans to make its nonprofit parent company a shareholder in the new for-profit enterprise, and to appoint a committee to oversee and distribute the assets that flow into it. OpenAI met with the petitioners before they filed their petition Wednesday and offered to have their respective legal teams meet, according to an email seen by POLITICO, and a person with knowledge of the situation who was not authorized to discuss it publicly. Bonta's office said in an emailed statement that the California 'Department of Justice is committed to protecting charitable assets for their intended purpose.' His office declined to comment on any ongoing investigations, but referenced its letter to OpenAI requesting restructuring plans and the value of its charitable assets. OpenAI countersued Musk in a California court on Wednesday, directly disputing his claims and accusing him of intentionally trying to hamstring OpenAI as he builds his own competitor , xAI. 'Elon's nonstop actions against us are just bad-faith tactics to slow down OpenAI and seize control of the leading AI innovations for his personal benefit,' the company wrote on X , the site Musk owns. The Delaware attorney general's office has said it is in conversation with OpenAI and is reviewing the matter. Musk's attorneys have tried to bring Bonta into the case he filed against OpenAI on public interest grounds, but so far the attorney general has declined, said Rose Chan Loui, a nonprofit law expert at UCLA. Bonta 'is trying to get out of the federal case mostly on the argument that they can't be dragged into federal court,' she said. But 'Elon Musk has filed a brief saying that we're not dragging you in as a defendant, we're dragging you as a matter that concerns you.' At stake is not just the open question of how much of the company's $300 billion valuation should be conserved as nonprofit assets, Loui said. The company in raising its latest $40 billion funding round agreed to return half that amount if it does not make the change to a for-profit this year. Like this content? Consider signing up for POLITICO's California Decoded newsletter .
